Improvements sought to pension program

The City of Hagerstown might be able to afford a separate and enhanced retirement plan for police and fire personnel after all, the city's personnel manager said Tuesday.

City and police union officials have debated the issue of a separate pension plan for years, but city officials haven't given the OK because they didn't want costs to the city to increase.

When City Council members approved a three-year contract last September with members of the police union they agreed to study the matter further.

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Personnel Manager Eric Marburger said Tuesday such a plan might be possible without increasing city costs because the state has made money on investments made with employee retirement funds.

The city could get four times more money, $3.1 million, from the state than it would have three years ago if all city police and fire personnel in the new state retirement plan agree to withdraw and join a city retirement plan, Marburger said.

The $3.1 million accounts for those employees' assets in the state system, Marburger said. The city got that figure in writing from the state retirement agency, but it is based on assumptions that could change, he said.

Marburger said the goal is for public safety personnel to earn 50 percent of their pay in pension benefits after 25 years of service, although the benefits might only increase to about 45 percent.

Now employees receive between 24 percent and 30 percent of their pay in retirement benefits after 30 years of service, he said.

Separately, city officials are working with local state legislators to amend proposed legislation so all municipal employees will receive enhanced retirement benefits, Marburger said.

Public safety employees could end up contributing as much as 7 percent of their salaries toward a new city retirement plan, said Police Chief Dale Jones. They contribute nothing to the state plan now, he said.

The council must decide by the end of March whether to pursue a separate plan in order to have all the paperwork ready by the state's annual June 30 deadline to withdraw from the state retirement plan, Marburger said.

If the city does withdraw from the state plan this year, the new city retirement plan would take effect July 1, he said.

Councilman Lewis C. Metzner said city officials could lose their credibility with employee unions if the deal is as good as it sounds and they don't pursue the matter.

Council members said they want more specifics and need to learn about how pensions are operated if the city is to get into that business. They also want affected employees notified of the meetings so they can learn as well.

The mayor and council will discuss the pension matter further on March 10.

If city officials decide to start their own plan, the financial planning and legal services needed to prepare for withdrawal from the state system will cost between $15,000 and $30,000, Marburger said.

Councilwoman Susan Saum-Wicklein told Marburger to ask the two public safety employee unions if they will help pay those costs.